1. Chapter 8 Enterprise Business Systems James A. O'Brien, and George Marakas Management Information Systems, 9 th ed. Boston, MA: McGraw-Hill, Inc., 2009. ISBN: 13 9780073376769 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives 1.Identify and give examples to illustrate the following aspects of customer relationship, enterprise research, and supply chain management systems – Business processes supported – Customer and business value provided – Potential challenges and trends 8-2

3. Customer Relationship Management A customer-centric focus – Customer relationships have become a company’s most valued asset – Every company’s strategy should be to find and retain the most profitable customers possible 8-3

4. What is CRM? Managing the full range of the customer relationship involves – Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels – Providing the customer with a single, complete view of the company and its extended channels CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes 8-4

5. Application Clusters in CRM 8-5

6. Contact and Account Management CRM helps sales, marketing, and service professionals capture and track relevant data about – Every past and planned contact with prospects and customers – Other business and life cycle events of customers Data are captured through customer touchpoints – Telephone, fax, e-mail – Websites, retail stores, kiosks – Personal contact 8-6

7. Sales A CRM system provides sales reps with the tools and data resources they need to – Support and manage their sales activities – Optimize cross- and up-selling CRM also provides the means to check on a customer’s account status and history before scheduling a sales call 8-7

8. Marketing and Fulfillment CRM systems help with direct marketing campaigns by automatic such tasks as – Qualifying leads for targeted marketing – Scheduling and tracking mailings – Capturing and managing responses – Analyzing the business value of the campaign – Fulfilling responses and requests 8-8

9. Customer Service and Support A CRM system gives service reps real-time access to the same database used by sales and marketing – Requests for service are created, assigned, and managed – Call center software routes calls to agents – Help desk software provides service data and suggestions for solving problems Web-based self-service enables customers to access personalized support information 8-9

10. Retention and Loyalty Programs It costs 6 times more to sell to a new customer An unhappy customer will tell 8-10 others Boosting customer retention by 5 percent can boost profits by 85 percent The odds of selling to an existing customer are 50 percent; a new one 15 percent About 70 percent of customers will do business with the company again if a problem is quickly taken care of Enhancing and optimizing customer retention and loyalty is a primary objective of CRM – Identify, reward, and market to the most loyal and profitable customers – Evaluate targeted marketing and relationship programs 8-10

11. The Three Phases of CRM 8-11

12. Benefits of CRM Identify and target the best customers Real-time customization and personalization of products and services Track when and how a customer contacts the company Provide a consistent customer experience Provide superior service and support across all customer contact points 8-12

13. CRM Failures Business benefits of CRM are not guaranteed – 50 percent of CRM projects did not produce promised results – 20 percent damaged customer relationships Reasons for failure – Lack of understanding and preparation – Not solving business process problems first – No participation on part of business stakeholders involved 8-13

14. Trends in CRM Operational CRM – Supports customer interaction with greater convenience through a variety of channels – Synchronizes customer interactions consistently across all channels – Makes the company easier to do business with Analytical CRM – Extracts in-depth customer history, preferences, and profitability from databases – Allows prediction of customer value and behavior – Allows forecast of demand – Helps tailor information and offers to customer needs 8-14

15. Trends in CRM (cont’d) Collaborative CRM – Easy collaboration with customers, suppliers, and partners – Improves efficiency and integration throughout supply chain – Greater responsiveness to customer needs through outside sourcing of products and services Portal-based CRM – Provides users with tools and information that fit their needs – Empowers employees to respond to customer demands more quickly – Helps reps become truly customer-faced – Provides instant access to all internal and external customer information 8-15

16. ERP: The Business Backbone ERP is a cross-functional enterprise backbone that integrates and automates processes within – Manufacturing – Logistics – Distribution – Accounting – Finance – Human resources 8-16

17. What is ERP? Enterprise resource planning is a cross-functional enterprise system – An integrated suite of software modules – Supports basic internal business processes – Facilitates business, supplier, and customer information flows 8-17

18. ERP Application Components 8-18

19. ERP Process and Information Flows 8-19

20. Benefits and Challenges of ERP ERP Business Benefits – Quality and efficiency – Decreased costs – Decision support – Enterprise agility ERP Costs – Risks and costs are considerable – Hardware and software are a small part of total costs – Failure can cripple or kill a business 8-20

21. Costs of Implementing a New ERP 8-21

22. Causes of ERP Failures Most common causes of ERP failure – Under-estimating the complexity of planning, development, training – Failure to involve affected employees in planning and development – Trying to do too much too fast – Insufficient training – Insufficient data conversion and testing – Over-reliance on ERP vendor or consultants 8-22

23. Trends in ERP 8-23

24. Supply Chain Management (SCM) Fundamentally, supply chain management helps a company – Get the right products – To the right place – At the right time – In the proper quantity – At an acceptable cost 8-24

25. Goals of SCM The goal of SCM is to efficiently – Forecast demand – Control inventory – Enhance relationships with customers, suppliers, distributors, and others – Receive feedback on the status of every link in the supply chain 8-25

26. What is a Supply Chain? The interrelationships – With suppliers, customers, distributors, and other businesses – Needed to design, build, and sell a product Each supply chain process should add value to the products or services a company produces – Frequently called a value chain 8-26

27. Supply Chain Life Cycle 8-27

28. Electronic Data Interchange One of the earliest uses of information technology for supply chain management The electronic exchange of business transaction documents between supply chain trading partners The almost complete automation of an e- commerce supply chain process Many transactions occur over the Internet, using secure virtual private networks 8-28

29. Typical EDI Activities 8-29

30. Roles and Activities of SCM in Business 8-30

31. Planning & Execution Functions of SCM Planning – Supply chain design – Collaborative demand and supply planning Execution – Materials management – Collaborative manufacturing – Collaborative fulfillment – Supply chain event management – Supply chain performance management 8-31

32. Benefits and Challenges of SCM Key Benefits – Faster, more accurate order processing – Reductions in inventory levels – Quicker times to market – Lower transaction and materials costs – Strategic relationships with supplier 8-32

33. Goals and Objectives of SCM 8-33

34. Benefits and Challenges of SCM Key Challenges – Lack of demand planning knowledge, tools, and guidelines – Inaccurate data provided by other information systems – Lack of collaboration among marketing, production, and inventory management – SCM tools are immature, incomplete, and hard to implement 8-34

35. Trends in SCM 8-35